REPORT: It Sounds Like People Are Losing Interest In Samsung's Best Phone (SSNLF)

Friday

Jul 11, 2014 at 8:56 AM

Lisa Eadicicco

Samsung is reportedly cutting its orders for Galaxy S5 components just days after it said that its Q2 operating income has plummeted to the lowest it's been in two years.

Component makers in Taiwan are only ordering 15 million units for Q3 2014, which is down from the 21 million these manufacturers ordered for the second quarter of this year, according to a new report from China's Economic News Daily first spotted by Patently Apple.

The report also notes that Samsung has cut orders for its Galaxy S4 (last year's flagship phone) back to 5 million units from 6 million units.

This comes just it was reported that Samsung's second quarter operating income had dropped by 24% compared to the previous year.

According to the AP, Samsung said its operating income for Q2 was 7.2 trillion won ($7.1 billion), which fell below analysts' expectations for 8 trillion won. Sales also fell by 10% compared to the same period in 2013.

The Korea-based smartphone maker attributed part of this recent decline to its sales in China. It's cheaper low-end smartphones haven't been catching on as much as it had hoped.

That being said, Galaxy S5 sales boomed following the phone's launch. Samsung said it sold 11 million Galaxy S5 units within its first month on the market, which is slightly higher than the 10 million Galaxy S4 phones it sold within its first month in 2013.

The problem is the Galaxy S5 is facing more competition than ever in China. Companies like Lenovo, OnePlus, and Xiaomi are making high-quality phones on par with the S5 that cost much less.

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